Regulation of Cryptocurrencies in the Banking System of Ukraine

Abstract

The article examines the current state and peculiarities of cryptocurrencies regulation in Ukrainian banking system. The legal nature of cryptocurrencies is analyzed through the prism of international and national approaches to their definition, in particular the positions of the European Central Bank and the FATF. The provisions of the Law of Ukraine “On Virtual Assets” and the reasons for its substandard functioning in modern conditions are considered. The position of the National Bank of Ukraine regarding cryptocurrencies, which is characterized by a conservative approach and an emphasis on the hryvnia as the only legal means of payment in Ukraine, has been studied in detail. The NBU's initiatives regarding the introduction of the e-hryvnia as a national digital currency have been analyzed. The main advantages of integrating cryptocurrencies into the banking system are also identified, in particular, the possibility of reducing transaction fees, the potential of attracting foreign investment and the need to enhance consumer protection mechanisms in financial services. The key challenges associated with the implementation of cryptocurrencies have been outlined, including legal uncertainty, high volatility of crypto assets, cybersecurity threats, and the need to improve mechanisms for protecting the rights of financial services consumers. The international experience of cryptocurrency regulation was studied, and three main models of regulation were identified: liberal (Japan, Switzerland), conservative (EU, USA) and restrictive (China, India). Comprehensive recommendations for improving the legal framework of cryptocurrency regulation in Ukraine are proposed, including the necessity of adopting a fundamental law, establishing an effective supervisory system, implementing licensing mechanisms for cryptocurrency exchanges, and developing clear taxation rules. Particular attention is given to the potential of blockchain technology in the banking sector as a tool for increasing transparency and reducing operational costs. The article emphasizes the importance of balancing innovation stimulation with ensuring financial stability, as well as the need for harmonizing Ukrainian legislation with international standards for digital asset regulation. It is concluded that effective cryptocurrency adoption requires not only legal regulation but also the development of digital infrastructure, improvement of financial literacy among the population, and strengthening mechanisms for combating financial crimes. Keywords: cryptocurrency, virtual assets, banking system, e-hryvnia, National Bank of Ukraine, digital currencies.